Egg&Smolt® 3.2

U.S. Salmon Digest
Volume 3, Issue 2
March/April 1993

Marketing Farmed Salmon: An Interview with Pete Granger

Pete Granger is executive director of the Washington Farmed Salmon Commission (WFSC), an organization which uses generic marketing to promote Washington farmed salmon. Granger has extensive experience in both the seafood industry, and in managing large organizations. His experience in the seafood industry ranges from being a commercial fisherman to serving as sales manager for Seafood Producers Cooperative in Alaska. He has served with a number of associations as lobbyist, executive director (West Coast Fisheries Development Foundation), and more recently as president (Halibut Association of North America and the Alaska Troll Salmon Processors Association).

E&S: What is your general background and interest in the salmon industry?

Granger: My previous background is on the wild side of the salmon industry. But farmed salmon has always interested me and I wanted to get back into association work. I think my past association work and generic marketing experience will come in handy at this new job.

E&S: What can you tell me about the history of the Washington Farmed Salmon Commission? It is only two months old I understand.

Granger: Right, officially my job started January 4th, but the effective start-date for the commission was December 1st of last year. It took almost a year for the salmon farmers in Washington to get together and interface with the Washington State Department of Agriculture to pull together the enabling legislation that created this commission or state agency.

It is truly a state agency and one of many commodity commissions. There are, you know, various commissions ranging from apple and wine to potatoes, and we're one of the small ones at this point. Commissions have to go through the state to obtain the legal power to assess (tax) its members.

E&S: Who founded the Commission and what is its goal?

Granger: All salmon farmers in Washington agreed to set up the commission. They felt that they needed to create a market identity for their product on a national and worldwide basis.

E&S: What are some of the benefits for the member farmers?

Granger: Washington farmed salmon soon will have a market identity. Promotional events in target markets developed by the commission will enhance sales for each individual member. The commission also will distribute research findings and that will help solve some technical problems common to all producers.

E&S: How is the Commission funded? Is there a membership fee?

Granger: No there is no membership fee. The commission is funded by taxing salmon farms: salt water pen operations and fresh water pan-sized salmon.

E&S: So all salmon farmers pay?

Granger: Yes, since all salmon farmers in the state signed the agreement; there were no negative votes. But there aren't very many farmers either. At this point, there are probably, let's see... nine producing entities, so it is a small group.

E&S: And what sorts of activities do they participate in?

Granger: Well, the Board of Directors meets monthly. Right now we're just pulling our marketing strategy together. It has taken a little while just to physically get the operation going. There are certain requirements that have to be in place as far as accounting... and we are subject to state audits from time to time as well. So I want to make sure that we've got that all under control starting out. Our assessment started as of December, so it will take us a while to build up some capital to undertake promotional activities.

E&S: What are some specific marketing ideas?

Granger: Well, we know that some of our fish goes to the mid-west but that most of it at this point remains on the West Coast. Some of that is consumed locally but much of it is shipped to California. About 80% is marketed to the food service industry (restaurants and institutions). So we are going to concentrate, at least initially, on the restaurant sector. We would like to create an image of freshness and quality for Washington state farmed salmon. There is a lot of farmed salmon as you know, and fairly comparable products coming from Chile, Europe and Canada. Our goal is not so much to compare ourselves to our competition. Rather we would like to capitalize on our premium product and emphasize that it is produced in-state. By projecting this image we can perhaps enhance our price and keep our product on the high end. We want to project that image both within the state of Washington and in the markets where we have the most exposure.

E&S: What sort of advertising media are you planning on using to do this?

Granger: Well, at this point we want to encourage as much of a broad-based media coverage as we can within the food industry and the markets we are going to target. So we'll stay pretty close to home initially - Washington state, Portland, Oregon, markets and possibly the Rocky Mountain states. We'll branch out as our resources grow.

We also want to be able to take some proactive measures from the public relations standpoint. We would like to emphasize that salmon farming is a home-grown, non-polluting type of industry.

E&S: So are you planning on doing this through advertising, magazine articles, or going on the air...?

Granger: Well, I'll do anything I can. I'd like to appear on talk shows. I'm going to try to write some pieces. We want to also emphasize the health benefits of farmed salmon.

E&S: Are they different from the benefits of wild salmon?

Granger: No, we think they are both healthy. And that's an important point to bring up. We are going to promote farmed salmon but we are certainly not going to do it at the expense of wild salmon. We are in favor of increasing demand for salmon in general. We want to develop the market so it can pull both of us along. I would love, ideally, to see both wild and farmed industries get together and promote their products generically. Coming from the wild fishing industry, I know that there are few who feel that way. Especially in Alaska, where much effort is put on promoting wild salmon through the Alaska Seafood Marketing Institute (ASMI). I believe they generally feel that farmed salmon has taken the market away from them especially the markets in Europe.

E&S: Are you planning on doing things similar to what ASMI has done?

Granger: Our budget is going to be fairly restrictive for the time being, so we don't see ourselves doing a lot of advertising yet because of the expense. We want to work with the distributors and brokers that sell our products to the restaurants; to try to create a premium quality image for the products and thereby to create some new markets. If we do print some materials it is going to be of an educational nature for 'wait-staff.'

We also want to do educational kinds of things like tours and one-day seminars to bring food editors, feature writers and restaurant people into the Puget Sound area. In terms of trade shows, we are going to stay pretty close to home. We'll be going down to a restaurant show next month in Portland - a Northwest Restaurant Show. We are going to try to encourage cooperative educational efforts with other Washington state commodity commissions. I've already talked with people from Washington's wine industry. This effort is already paying off.

E&S: How are you planning to make the link with the wine people?

Granger: Well, for example there are two salmon farms on Bainbridge Island and at least a couple wineries. The wine people tell me that it would be very easy to combine a wine tasting event with a tour of a salmon farm for some food editors. I think that is the kind of thing we will try to do.

E&S: That sounds very appealing. And it would also sound appealing to the consumer, yet I understand that the consumer is not your primary target.

Granger: We want to get to the consumer as well. We haven't decided just how to do that with our limited funds. I don't think we are going to be producing, for example, printed materials, in the numbers that it will take to get to the consumer level. It is just something we have not yet discussed.

There is, by the way, an international joint marketing effort that we are contributing to: The International Salmon Farmers Association. Chile and British Columbia, Canada, have contributed I believe, $50,000 to a joint marketing effort to get to the consumer, and promote farmed salmon. We will contribute a small amount - not nearly that much - to that effort and maybe rely on that effort at least this year as a kind of companion piece.

E&S: You mentioned earlier that you plan on sticking to the West Coast. Are you planning on branching out further later on?

Granger: It really depends on where the majority of our farmers want to expand. If we see an opportunity for creating a better market for our product on the East Coast, then we'll do it. But then we run head to head with farmed salmon from Maine and the Canadian maritime. I think we are better off to stick to our traditional markets for now.

The other situation is that Washington State is fairly limited by it's lack of political will to create new sites in Puget Sound. Our production is not going to increase tremendously in the next few years. Simply getting sites in Washington state waters is very, very difficult, mainly because shore-dwellers don't want to see net pens in the waters; they feel that they detract from the water's natural beauty. There is an argument counter to that. We, of course, feel that they are not that obtrusive.

E&S: I wonder if your marketing efforts aren't going to benefit other producers of farmed salmon, and if that won't in turn push your prices down?

Granger: Well there are going to be fluctuations. We'd just like to think that our fish, from a quality stand point, can offer a product that may get us a few cents a pound more than what someone else is getting on a given day. But in general, the price will go up and down. There are too many seafood choices on the market for the consumer. Again, we hope at least on a given day or week that our prices will be on the higher end of the price spectrum.

I think a lot of people just need some knowledge about the product. We are in general going to try to co-op with any entity that is a companion product to ours to get more bang for our buck.

E&S: And it also seems that you are targeting companion products that happen to be Washington grown, too -- for example the wine.

Granger: Right, of course this is an idea that some other groups have capitalized on Washington grown fryers (fresh chicken) for example and apples ... I don't know how successful we'll be but we certainly feel that kind of image could help us if we do it the right way.

E&S: So you feel that the Washington fryers and apples people have been successful in creating that image?

Granger: Well, as far as I know they've been very successful in creating that kind of an image, especially to in-state consumers. They have more expensive products than their competing products. But people have a tendency to support the homegrown traditional industry, I think. We have a little bit of a problem when farmed products tussle with the homegrown wild fishing industry. That for us just means a little more competition.



Progress in the Fight Against Furunculosis

Drs. Nikl and Albright from the Vancouver Department of Fisheries and Oceans have used innovative methods to find a preventive treatment for furunculosis. Starting from the Japanese folkloric belief that Shitake mushrooms contain agents that combat cancer, the doctors reproduced Skizofilum commune, the fungus found in Shitake mushrooms. Skizofilum commune contains the B-Glucan chemical, which can be added to the fish's feed in powder form. B-Glucan stimulates the fish's immune system by combating the furunculosis bacteria. The researchers anticipate that the increased activity of the immune system will also combat other bacterial diseases so that perhaps the need for antibiotics in fish rearing will be reduced. The patent for this new method of furunculosis prevention called VitaStim® has been sold to the Taiko Company in Japan, where the method is used extensively.

A recent article in Northern Aquaculture shows how B-Glucan compares favorably to antibiotics. B-Glucan is easily broken down by bacteria that occurs naturally in water so that no sediment accumulates on the water surface. It is not affected by seawater, and there is no known instance of a bacterial strain developing a resistance to it. Finally, B-Glucan may effectively control viruses and parasites in addition to bacteria. Is VitaStim® an aquaculturists' silver bullet?



Salmon Prices and Harvest Predictions

Prices for Alaskan salmon this season are generally expected to be down from 1992. Japan's sluggish economy and competition from farmed salmon worldwide will affect prices. Sockeye will be hit hardest due in part to large carryover inventories. Coho prices are probably in for a slight drop, but King and Chinook look fairly stable. Pink prices will remain stable, or possibly better than last year because U.S. inventories of canned pinks are finally moving out.

Predictions for salmon harvest this season are also showing up. Fisherman's News published estimates in the form of "educated guesses". The over-all catch should be up about 25% from 1992. The increase should come mostly in the form of pinks, whose numbers should go from 60 million to 107 million, reflecting the normal cyclical odd year increase in pink harvest. The sockeye catch should be down about 17%, and cohos will probably also be less numerous. Chinook and chum will probably be about the same as last year.



Worldwide Farmed Salmon Production for 1992

Although the over-all worldwide production of farmed salmon dropped from 325,000 tons to 300,000 in 1992, the industry still promises to have a bright future. The decline in production last year is due mostly to Norway's misfortunes. Last year Norway, the world's leader in salmon production, suffered from oversupply, low prices, and US anti-dumping actions. In 1992 Norway's production fell to 140,000 tons from 1991's 155,000 tons. The good news is that production in the U.S. totaled about 13,000 tons, which was almost twice what was produced here last year. Chile is also proving a strong party in the farmed salmon market, as that country produced about 48,000 tons last year, and promises to produce much more this coming year. Canada was a also key player last year with a production of about 30,000 tons. Although the present overall worldwide production is 300,000 Pacific Fishing predicts that farmed salmon will increase to 400,000 to 500,000 by the year 2000.